Waiving Departmental Review of Appraisals and Valuations of Indian Property, 28777-28785 [2017-13191]

Agencies

• DEPARTMENT OF THE INTERIOR
• Office of the Secretary

[Federal Register Volume 82, Number 121 (Monday, June 26, 2017)]
[Rules and Regulations]
[Pages 28777-28785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13191]


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DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 100

[167A2100DD/AAKC001030/A0A501010.999900]
RIN 1093-AA20


Waiving Departmental Review of Appraisals and Valuations of 
Indian Property

AGENCY: Office of the Secretary, Interior.

ACTION: Final rule.

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SUMMARY: In 2016, Congress passed the Indian Trust Asset Reform Act 
(ITARA), which requires the Secretary of the Interior to establish and 
publish in the Federal Register minimum qualifications for individuals 
to prepare appraisals and valuations of Indian trust property. This 
rule establishes the minimum qualifications and implements provisions 
of ITARA that require the Secretary to accept appraisals and valuations 
without additional review or approval under certain circumstances.

DATES: This rule is effective on July 26, 2017.

FOR FURTHER INFORMATION CONTACT: Ms. Elizabeth Appel, Office of 
Regulatory Affairs and Collaborative Action--Indian Affairs at 
elizabeth.appel@bia.gov or (202) 273-4680.

SUPPLEMENTARY INFORMATION:

I. Background
II. Summary of Final Rule
III. Responses to Comments
IV. Procedural Requirements
    A. Regulatory Planning and Review (E.O. 12866)

[[Page 28778]]

    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act
    D. Unfunded Mandates Reform Act
    E. Takings (E.O. 12630)
    F. Federalism (E.O. 13132)
    G. Civil Justice Reform (E.O. 12988)
    H. Consultation With Indian Tribes (E.O. 13175)
    I. Paperwork Reduction Act
    J. National Environmental Policy Act
    K. Effects on the Energy Supply (E.O. 13211)
    L. Reducing Regulation and Controlling Regulatory Costs (E.O. 
13771)

I. Background

    On June 22, 2016, the Indian Trust Asset Reform Act, Public Law 
114-178, was signed into law. Title III of the Act requires the 
Department of the Interior (Interior) to establish minimum 
qualifications for individuals to prepare appraisals and valuations of 
Indian trust property and allow an appraisal or valuation by a 
qualified person to be considered final without being reviewed or 
approved by Interior.
    On September 22, 2016, Interior published a proposed rule (81 FR 
65319) to implement ITARA and requested public comments for 60 days. 
This final rule implements ITARA and responds to the comments received 
on the proposed rule. This rule establishes the minimum qualifications 
for individuals to prepare appraisals and valuations of Indian trust 
property and allows an appraisal or valuation by a qualified appraiser 
to be considered final without being reviewed or approved by Interior.
    The Act also requires appraisals and valuations of Indian trust 
property to be administered by a single administrative entity within 
Interior. This rule is finalized under the Office of the Secretary 
within the Department of the Interior to allow for flexibility if 
another entity or agency within Interior is designated the single 
entity to administer appraisals and valuations of Indian trust 
property.

II. Summary of Final Rule

    This rule establishes a new Code of Federal Regulations (CFR) part 
to establish the minimum qualifications for appraisers, employed by or 
under contract with an Indian tribe or individual Indian, to become 
qualified appraisers who may prepare an appraisal or valuation of 
Indian property that will, in certain circumstances, be accepted by the 
Department without further review or approval. The final rule clarifies 
that, because the Department is not reviewing and approving the 
appraisal or valuation, it is not liable for any deficiency or 
inaccuracy in the appraisal or valuation.
    Subpart A, General Provisions, defines terms used in the 
regulation, describes the purpose of the regulation, and provides the 
standard Paperwork Reduction Act compliance statement. The terms are 
defined to include, in the context of this regulation, any property 
that the U.S. Government holds in trust or restricted status for an 
Indian tribe or individual Indian, to include not just land, but also 
natural resources or other assets. Other important terms include 
``appraisal,'' ``valuation,'' and ``qualified appraiser.'' Consistent 
with the statutory direction, the purpose of the regulations is written 
broadly, to include appraisals or valuations of any Indian trust 
property, including:
     Appraisals and valuations of real property;
     Appraisals and valuations of timber, minerals, or other 
property to the extent they contribute to the value of the whole 
property (for use in appraisals and valuations of real property); and
     Appraisals and valuations of timber, minerals, or other 
property separate from appraisals and valuations of real property.
    Subpart B, Appraiser Qualifications, establishes the minimum 
qualifications an appraiser must meet to be considered a ``qualified 
appraiser'' and establishes that the Secretary must verify that the 
appraiser meets those minimum qualifications.
    This subpart requires that the verification information be 
submitted contemporaneously with the appraisal or valuation so that the 
Secretary can verify that the appraiser is a qualified appraiser at 
that point in time.
    Subpart C, Appraisals and Valuations, notes that some transactions 
requiring Secretarial approval under titles 25 and 43 of the Code of 
Federal Regulations (e.g., 25 CFR part 162, Leases and Permits; 25 CFR 
part 169, Rights-of-Way on Indian Land) require the submission of 
appraisals and valuations to the Department. This subpart also sets out 
the circumstances in which the Department will forego review and 
approval of the appraisal or valuation. The rule requires submission of 
the appraisal or valuation to the Department regardless of whether the 
Department will be reviewing and approving the appraisal or valuation. 
This requirement is included because the Department must use the 
results of the appraisal or valuation in completing the transaction 
requiring Secretarial approval.
    The rule requires the Department to forego review and approval of 
the appraisal or valuation and consider the appraisal or valuation 
final if three conditions are met: (1) The appraisal or valuation was 
completed by a qualified appraiser; (2) the Indian tribe or individual 
Indian expressed their intent to waive Departmental review and 
approval; and (3) no owner of any interest in the Indian property 
objects to the use of the appraisal or valuation without Departmental 
review and approval. The first condition is clearly required by ITARA. 
The second condition is implied by ITARA. The number of individual 
Indian owners of fractionated tracts that must express their intent to 
waive Departmental review and approval, under the second condition, 
would depend upon the underlying title 43 or title 25 requirements. For 
example, if the underlying transaction is a right-of-way, then the 
owners of a majority of the interests in the tract must express their 
intent to waive Departmental review and approval, consistent with the 
general consent requirements in 25 CFR part 169. The third condition, 
that no Indian property owner objects, is necessary to address 
situations where one or more owners of the tract still want 
Departmental review and approval of the appraisal or valuation, 
consistent with our trust responsibility to all owners of the Indian 
trust property.
    This subpart exempts certain transactions, thereby requiring 
Departmental review of the appraisal or valuation. The exempted 
transactions include transactions under any legislation expressly 
requiring the Department to review and approve an appraisal or 
valuation, such as the Land Buy Back Program under the Claims 
Resolution Act of 2010 (Pub. L. 111-291), and purchase at probate under 
43 CFR part 30, because the judge will not be in a position to verify 
an appraiser's qualifications. The Department will also review any 
appraisal for an acquisition by the United States.

III. Responses to Comments

A. General Support for the Rule

    Several tribes stated their support of the ITARA provision to 
eliminate the current requirement for Office of Appraisal Services 
review to reduce delays. One tribe noted the importance of the 
Department accepting and approving, without further review or delay, 
any appraisal or valuation that complies with the appraiser's 
qualification standards and is satisfactory to the Indian property 
owner. Another tribe stated its support for the minimum qualifications 
for appraisal services.

[[Page 28779]]

    Response: This rule allows the Department to carry out Congress's 
specific direction in ITARA that the Department should not review or 
approve appraisals submitted by qualified appraisers.

B. Minimum Qualifications for Appraisers

    One tribe stated that the qualifications for individuals to prepare 
appraisals and valuations of Indian property should be the same that 
apply to professional appraisers in the private sector.
    Response: The Department agrees with this comment and has strived 
to match the requirements for qualified appraisers to those 
requirements currently in place for its own appraisers and contracted 
appraisers.
    One tribe stated the procedures should require: (1) Departmental 
approval of appraisers who satisfy minimum qualifications; (2) 
Departmental review within a specified period with a default of 
automatic approval; (3) minimum requirements for qualifications of 
review appraisers.
    Response: This rule establishes minimum qualifications for 
appraisers conducting appraisals that do not need Departmental review. 
The Department will review the appraiser's qualifications to determine 
whether the appraiser meets the minimum qualifications when the 
appraisal is submitted. The tribe's request for a Departmental review 
of the appraiser's qualifications within a specified period, with a 
default of automatic approval, is not necessary because the process of 
ensuring an appraiser meets the minimal qualifications is intended to 
be less burdensome and faster than a review of the appraisal.
    One commenter stated that the rule's minimum qualifications for 
appraisers should be more stringent and the rule should require 
appraisals to be performed by a multidisciplinary group of experts who: 
(1) Meet all the criteria in the rule; (2) have completed a mandatory 
valuation ethics training course; and (3) have collaborated with Native 
American groups to better understand the cultural value of the lands in 
question. This commenter stated that the appraisal must account for 
cultural values of those with sacred ties to the ecosystems and lands. 
The commenter reasoned that the process of assigning value to an area 
is subjective, and using the knowledge and methodologies of a diverse 
group of experts and stakeholders would prevent a single individual 
from the power to assign a monetary value to sacred land.
    Response: The final rule does not incorporate the commenter's 
suggestions because an appraisal or valuation is, by definition, the 
opinion as to a property's value of a single person qualified to give 
such an opinion, rather than, as suggested by the commenter, the 
opinion of a multi-disciplinary team. The final rule's requirements for 
State licensure, good standing, and compliance with the Uniform 
Standards of Professional Appraisal Practice (USPAP) address the 
commenter's other concerns.
    The Appraisal Institute stated that requiring generally accepted 
standards in the appraiser qualification criteria would enhance 
credibility and reliability of the appraisals being performed.
    Response: Section 100.200 of the rule requires qualified appraisers 
to meet USPAP rules and provisions applicable to appraisers, which are 
generally accepted standards; therefore, no change to the final rule is 
necessary in response to this comment.
1. State Licensing as a Qualification
    Several tribes strongly objected to relying on State licensing for 
appraisers and a determination of good standing by State regulatory 
agencies, and asserted that the rule should instead rely on tribal 
licensing and require compliance with tribal laws and regulations.
    Response: Under the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989 (FIRREA), 12 U.S.C. 3331 et seq., each U.S. 
State or territory has a real estate appraiser regulatory agency that 
is responsible for licensing and certifying real estate appraisers and 
supervising their appraisal-related activities, as required by Federal 
law. The Appraisal Subcommittee of the Federal Financial Institutions 
Examination Council has oversight authority over the States and The 
Appraisal Foundation to ensure the minimum qualifying criteria to 
license and certify real estate appraisers are implemented and that 
appraisers are held to a professional set of ethical standards. The 
final rule does not require compliance with tribal appraiser 
certification in lieu of State certification because, currently, State 
certification programs are the industry standard under FIRREA. In fact, 
the Department is unaware of a currently operating tribal appraiser 
certification program and requires State certification of its own 
appraisers and contractor appraisers. Tribes are welcome to adopt their 
own standards for appraisers; however, for the Department to accept the 
appraisal or valuation without further review, it would have to review 
the tribe's standards contemporaneously with the appraisal. In other 
words, only the State license and standards allow the Department to 
accept an appraisal without further review at this time.
    The DOI Self-Governance Advisory Committee and several tribes 
stated that tribes should be permitted to adopt their own standards 
consistent with USPAP and Federal law to meet the unique needs tribal 
Nations have in assuming appraisal responsibilities.
    Response: This rule provides that it will accept an appraisal or 
valuation without Departmental review only if the appraiser is a 
``qualified appraiser,'' meaning, among other things, that the 
appraiser has a Certified General Appraiser license in the State in 
which the property is located, and complies with USPAP provisions 
applicable to appraisers. Tribes are welcome to adopt their own 
standards for appraisers; however, for the Department to accept the 
appraisal or valuation without further review, it would have to review 
the tribe's standards contemporaneously with the appraiser 
qualifications that are being submitted with the appraisal under this 
part.
    A tribal member suggested that tribes should have their own 
appraisal process so they don't have to pay $2,500 for an appraisal 
that reveals a property value of much less.
    Response: This rule will allow for the use of qualified appraisers 
at whatever cost they are available. To the extent the commenter is 
addressing the regulation's requirement to use appraisers qualified to 
conduct commercial appraisals even where the property may only require 
qualifications to conduct a residential appraisal, it is important to 
keep in mind that this rule does not require such appraiser 
qualifications in all instances. Rather, this rule requires those 
heightened appraiser qualifications only if the appraisal is being 
submitted for Departmental acceptance without further Departmental 
review.
2. General Appraiser Certification as a Qualification
    One tribe stated that not all appraisers have the General Appraiser 
certification (e.g., residential appraisers), and that it is an 
additional burden to require it because it is hard to find appraisers 
on reservations and will be even harder to find appraisers with the 
General Appraiser certification. This tribe stated that, instead, the 
type of land being appraised should drive the qualifications for the 
appraiser. Likewise, another tribe stated that the use of a ``Certified 
General Appraiser'' in certain geographic areas, for example

[[Page 28780]]

in the State of Oklahoma, would be futile and suggests instead 
requiring use of a ``licensed appraiser.'' Alternatively, the tribe 
suggests adding that the requirement for a Certified General Appraiser 
be waived if the tribe has made diligent efforts but has been unable to 
procure the services of a Certified General Appraiser.
    Response: The General Appraiser license is required for a 
``qualified appraiser'' because these are appraisers that can submit 
any appraisal without further Departmental review or approval. If an 
appraiser has a license specific to residential appraisals, the 
appraiser may conduct its residential appraisals under the license, but 
the Department must review the appraisal to ensure that the appraisal 
is within the scope of the appraiser's license.
3. Qualification for Specialty Appraisals
    A tribe stated that the appraiser should have expertise in 
valuation of resources involved in the appraisal. Likewise, the Indian 
Land Tenure Foundation noted that the appraiser performing specialty 
appraisals (timber and minerals) must have demonstrated the specialized 
skills.
    Response: Section 100.200(a)(3) requires compliance with USPAP 
competency requirements applicable to the type of property being 
appraised or valued, including competency in timber and mineral 
valuations if applicable to the subject property.
    A tribal commenter stated that the rule should require appraisers 
to have an understanding of general Federal Indian law and special 
obligations under tribe-specific relationships.
    Response: The rule does not impose the requirement for appraisers 
to have expertise in Federal Indian law or tribal relationships because 
this expertise is not necessary to conduct an accurate appraisal and, 
if required, would likely narrow the universe of qualified appraisers 
to an untenable supply level.
4. Other Certifications
    A tribal member suggested requiring appraisers to be certified 
under the Certified Federal Surveyor Program from the Bureau of Land 
Management.
    Response: The final rule does not incorporate this suggestion 
because the Certified Federal Surveyor program applies to surveyors, 
rather than appraisers.
5. Professional Designation of Appraisers
    The Appraisal Institute urged the Department to include in the 
minimum qualifications for appraisers recognition of professional 
designations from nationally recognized appraisal organizations that 
confer competency-based designations. The commenter suggested that a 
professional designation is necessary to ensure appraisers have 
experience with appraisal review because the Department will not be 
reviewing the appraiser's appraisals. The Appraisal Institute stated 
that eliminating Departmental review of the appraisal dramatically 
increases risks and likened the practice to performing accounting 
functions without any audit processes.
    Response: The final rule does not impose the additional requirement 
requested by the commenter for professional designation from a 
nationally recognized appraisal organization because the rule already 
requires qualified appraisers to have experience with appraisal review, 
as demonstrated by a State-issued appraisal license, good standing with 
the State appraiser regulatory agency, and compliance with the Uniform 
Standards of Professional Appraisal Practice (USPAP) rules, including 
competency provisions. See 43 CFR 100.200. The additional requirement 
is unnecessary and the Department does not require this designation for 
its own contractors conducting appraisals.
6. Database of Qualified Appraisers
    A tribe suggested having appraisers register online for 
searchability by those who would like to hire them to do appraisals and 
valuations.
    Response: The Appraisal Subcommittee has an online, searchable 
database of appraisers, and most State appraisal boards have searchable 
databases of appraisers licensed by that State.
7. Review of an Appraiser's Minimum Qualifications
    One tribe stated that periodic review of qualifications should be 
required as standards and experience with individual appraisers change 
over time.
    Response: The rule requires the appraiser to submit qualifications 
with each appraisal to allow for Department's review of the appraiser's 
qualifications.

B. Appraisals

    A tribal member stated that there is a fundamental misunderstanding 
as to what an appraisal is: Specifically, that an appraisal is not 
equivalent to value; rather, it is an expert opinion to inform the 
owners (the beneficiary) and trustee as to what somebody's opinion of 
fair market value is.
    Response: The Department agrees with this comment.
1. Differentiating Appraisals From Valuations
    A tribal member asked whether an appraisal and a valuation are 
different, and whether either evaluates tribal rights such as water 
rights or gathering rights for medicine.
    Response: The final rule defines ``appraisal'' and ``valuation'' 
slightly differently; however, whether either evaluates tribal water 
rights or other rights will be determined by the statute and 
regulations authorizing the transaction rather than this regulation.
    Another tribal member stated that allotted land makes up most of 
the workload for appraisals, but under ILCA, only an ``estimate of 
value'' rather than an appraisal, is needed for a gift, sale, or 
exchange. He suggested instead defining what an ``estimate of value'' 
is.
    Response: This rule is establishing minimum qualifications for 
appraisers who may complete appraisals that the Department will rely 
upon without further review. The rule's definition of ``valuation'' 
could include the ``estimate of value'' mentioned by the commenter. If 
that ``estimate of value'' is prepared by an appraiser who meets the 
minimum qualifications of this rule, then the Department would accept 
the estimate of value without further review.
2. Appraisal Standards
    Several tribes recommended that any appraisal or valuation of 
Indian property be in accordance with authority in title 25 of the CFR, 
appraisal standards in the current edition of USPAP, and use of 
appraisal industry-recognized valuation methods and techniques.
    Response: This rule does not establish appraisal standards. The 
standards for appraisals or valuations of Indian property are already 
set out in memoranda of understanding that govern tribes with a self-
governance compact or contract.
    Several tribes suggested requiring adherence to the Uniform 
Appraisal Standards for Federal Land Acquisitions (UASFLA) if the 
transaction is to the United States.
    Response: The final rule, at Sec.  301(b)(2), clarifies that 
transactions transferring Indian property to the United States where 
the UASFLA applies are exempt from this rule.
    The Appraisal Institute stated that the proposed regulations should 
include a requirement that the appraisal or valuation reflect market 
value (as opposed to another value, such as ``use value'') because 
market value is most appropriate to determine ``just

[[Page 28781]]

compensation'' for a public use and otherwise because the standards 
have long been held as fair, reasonable, and just by Federal and local 
governments as the basis for Federal land acquisitions, land leases, 
rights-of-way, and other dispositions or uses.
    Response: This rule does not establish appraisal standards. The 
statute and regulations governing the particular transaction would 
dictate the standard for value to be used in the appraisal. To make the 
purpose of this new CFR part more transparent, the final rule updates 
the title of the CFR part from ``Appraisals and Valuations of Indian 
Property'' to ``Waiving Departmental Review of Appraisals and 
Valuations of Indian Property.'' Likewise, the final rule updates the 
subtitle C heading to ``Appraisals and Valuations; Departmental Review 
and Waivers.''
    One commenter stated that there is no rule that could guarantee a 
credible appraisal because the client may dictate conditions and 
instructions to an appraiser that affects the result, so the appraisal 
review serves as a check and ensures the client's instructions 
adequately support approval for the conveyance.
    Response: The Department agrees with this comment. In ITARA, 
Congress allowed for reliance on an appraisal without Departmental 
review of the appraisal.
    One tribe stated requirements for formal appraisals for 
transactions for negotiated sales involving informed consent of owners 
should be clarified.
    Response: This suggestion is outside the scope of the authority 
Congress granted for rulemaking in ITARA. This rule does not 
specifically address requirements for appraisals regarding negotiated 
sales; this rule establishes the minimum qualifications for an 
appraiser in those situations where the appraisal of Indian property 
will not be subject to Departmental review.

C. Process for Requesting Waiver of Departmental Review of Appraisal

    The Indian Land Tenure Foundation stated that a waiver of 
Departmental review should come after the appraisal is complete and not 
in the submission of the appraisal request.
    Response: The Department agrees; Sec.  100.203 requires submission 
of the request for waiver of Departmental review to accompany the 
appraisal.
    The Foundation also stated that the practice of requiring the 
appraiser to attach a certificate of qualifications to each appraisal 
is not a burden and should be required.
    Response: The Department agrees; the person or entity submitting 
the appraisal has the option to waive Departmental review or not. If 
the submitter chooses to seek a waiver of Departmental review, then a 
certificate of the appraiser's qualifications must be included.

D. Applicability of the Rule

    The American Gas Association, Interstate Gas Association of 
American, and the Utilities Group stated that ITARA was limited to 
those transactions where statutes expressly require an appraisal or 
valuation (such as the Indian Land Consolidation Act) and should not 
apply to all potential transactions under titles 25 and 43 (e.g., 
rights-of-way and renewals). These commenters pointed out that Section 
305 of ITARA [25 U.S.C. 5635(c)(2)] applies only to those Indian land 
transactions ``for which an appraisal or valuation is required,'' while 
proposed Sec.  100.300 would require an appraisal or valuation for all 
transactions requiring Secretarial analysis and approval under titles 
25 and 43 of the CFR. The gas associations suggested addressing this by 
revising Sec. Sec.  100.300 and 100.301 to state that appraisals and 
valuations must be submitted for transactions ``requiring appraisals as 
part of their authorization statute'' and where ``an appraisal or 
valuation of the property is expressly required by the statute 
authorization the transaction.'' These commenters stated that the 
automatic approval does not serve either tribes' or applicants' 
interest in transactions under statutes other than those specifically 
requiring an appraisal, for example, where Congress already addressed 
the standard and process for valuation by requiring Secretarial 
approval of just compensation.
    Response: ITARA does not discuss when an appraisal or valuation is 
required and this rulemaking does not affect whether a particular 
transaction requires an appraisal or valuation. The final rule does, 
however, refine Sec.  100.300 to clarify that appraisals and valuations 
are not required for all transactions requiring Secretarial approval 
under titles 25 and 43 of the CFR.
    Several utilities and utility associations expressed concerns about 
the effect of the rule on projects and rights-of-way that serve the 
public's energy needs. Some stated that the rule should not apply to 
rights-of-way transactions because those transactions have their own 
statutory scheme. Some also stated that the rule conflicts with 
existing statutes governing rights-of-way across Indian land, and 
specifically the statutory requirement for ``the payment of such 
compensation as the Secretary of the Interior shall determine to be 
just,'' because the rule would allow an appraisal to be deemed final 
without the Secretary assuring just compensation. See 25 U.S.C. 325.
    Response: As discussed above, the statute and regulations governing 
the particular transaction determine whether an appraisal or valuation 
is required for that transaction. The Secretary may use an appraisal or 
a valuation as a tool for determining whether there is ``just 
compensation'' under the cited statute. For rights-of-way, the 
regulations at 25 CFR part 169 establish how the Secretary determines 
whether there is ``just compensation'' and provides for use of an 
appraisal or valuation as a tool for that determination under certain 
circumstances. This rule merely allows for the use of an appraisal or 
valuation without Departmental review of the appraisal or valuation 
under ITARA (as opposed to Departmental review of whether there is 
``just compensation'').
    Several of these utility group commenters stated that, if the rule 
does apply to rights-of-way transactions, then the rule should require 
a fair market value as just compensation for rights-of-way and renewals 
to public entities and utilities that benefit the public interest. 
Commenters stated that allowing above-market valuations would allow 
tribes, without monitoring by the Secretary, to attempt to take 
advantage of the public interest by exploiting the public entities' and 
utilities' presence on Federal trust land. One commenter likewise 
stated its concern that the rule will permit tribes to demand in excess 
of fair market value for renewals of rights-of-way for public entities 
and public utilities that benefit the public interest. The commenter 
stated that it made investments in infrastructure in reliance on use of 
fair market value as the standard for the rights-of-way and renewals 
under the right-of-way statutory framework requiring just compensation 
to be fair market value.
    Response: These comments are beyond the scope of this rulemaking 
because this rulemaking addresses only appraiser qualifications for 
appraisals to be submitted and used without Departmental approval. This 
rulemaking does not address the standard for the underlying 
transaction. The statute and regulations governing the particular 
transaction determine whether fair market value or another standard is 
required.

E. Other Comments

    One tribe opposed the provision in the preamble and discussed at 
tribal consultation sessions that would have

[[Page 28782]]

stated that the Department is not liable for approving transactions 
based on appraisals submitted by a qualified appraisal. The tribe's 
opposition is to the apparent diminishment of the Federal trust 
responsibility. This tribe suggested Federal tort claims coverage or 
some other protection is appropriate to meet the trust responsibility, 
even where the tribe operates the program under self-governance. 
Another tribe stated there should be a presumption of Department 
liability for inaccurate appraisals unless the Department disapproved 
the appraisal.
    Response: The final rule, at section 304, adds regulatory text to 
explicitly state the Department's position that it cannot be liable for 
any deficiency or inaccuracy in the appraisal or valuation in those 
cases in which the tribe or individual Indian waives Departmental 
review and approval of the appraisal or valuation. A disclaimer of 
liability was discussed in the preamble to the proposed rule to inform 
individuals and entities who elect to forego Departmental review (as 
authorized by ITARA and this rule) that they are assuming any risks 
associated with their reliance upon the appraisal or valuation. It 
would be unreasonable to impose liability on the Department for 
appraisals the Department did not prepare and was specifically 
prohibited from reviewing at the direction of the individual or entity 
submitting it. The trust responsibility does not require that the 
Government act contrary to law, i.e., to review an appraisal or 
valuation we are specifically prohibited from reviewing. When an 
individual or entity chooses to waive Departmental review of the 
submission, that individual should not expect to be able to obtain 
relief from the Department for any negative consequences stemming from 
their use of that appraisal or valuation.
    A tribal member suggested having an online training program for 
appraisers.
    Response: This comment is outside the scope of this rulemaking, but 
the Department suggests checking with the State for any appraiser 
training programs.
    A utilities group and gas associations stated their belief that the 
rule is a major rule under 5 U.S.C. 804(2) and a significant regulatory 
action under E.O. 12866. These commenters stated that a cost-benefit 
analysis is required because the rule: (1) Will result in a major 
increase in the costs of rights-of-way for state and local governments 
and public utilities, which will adversely affect industry and millions 
of consumers and taxpayers nationwide; and (2) will have an aggregate 
effect of over $100 million on the economy because of staggering 
renewal rates and the thousands of miles of rights-of-way across the 
nation. One gas company commenter also noted the escalating costs of 
rights-of-way through Indian lands and that the rule exacerbates the 
issue by failing to make clear that fair market value is the 
appropriate standard for appraising and valuing rights-of-way for 
public entities and utilities.
    Response: This rule is not a major rule under 5 U.S.C. 804(2) or a 
significant regulatory action under E.O. 12866 because the rule 
addresses only whether the Department will review the appraiser's 
qualifications or will review each individual appraisal. The contents 
or use of any particular appraisal or group of appraisals for a 
particular type of transaction is speculative and beyond the scope of 
this regulation.
    One commenter stated that if the proposed rule violates a treaty, 
then it should not go into effect.
    Response: The Department is unaware of the rule violating any 
treaty.
    A few commenters noted there has been, and will be, an increase in 
the demand for appraisals due to the Land Buy-Back Program and the 
purchase at probate provision.
    Response: While these commenters may be correct regarding the 
demand for appraisals, this rule exempts appraisals conducted under the 
Land Buy-Back Program and the purchase at probate provisions of the 
American Indian Probate Reform Act of 2004.
    One tribe stated that development and use of mass appraisal systems 
and use of qualified third-party appraisers should be encouraged 
because there is a delay in Departmental review and approval of 
appraisals that has resulted in lost opportunities and repetitive 
appraisals because their longevity is limited.
    Response: The portion of the comment regarding mass appraisal 
systems is outside the scope of this rulemaking. This rule allows the 
use of qualified third-party appraisers.
    A tribal attorney stated that the rule should add a requirement to 
allow beneficiaries to view the work papers in appraisal reports.
    Response: This suggestion is outside the scope of the authority 
Congress granted for rulemaking in ITARA. Further, the Department was 
unable to identify legal authority to require the release of 
information under the control of the appraiser-client relationship.
    A tribal attorney stated that the rule should include language that 
appraisals will not expire.
    Response: This suggestion is outside the scope of the authority 
Congress granted for rulemaking in ITARA.
    A tribal member suggested a central Web site for value of the land.
    Response: This suggestion is outside the scope of the authority 
Congress granted for rulemaking in ITARA and may pose Privacy Act 
issues.

IV. Procedural Requirements

A. Regulatory Planning and Review (E.O. 12866)

    Executive Order (E.O.) 12866 provides that the Office of 
Information and Regulatory Affairs (OIRA) at the Office of Management 
and Budget (OMB) will review all significant rules. OIRA has determined 
that this rule is not significant.
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the Nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
The E.O. directs agencies to consider regulatory approaches that reduce 
burdens and maintain flexibility and freedom of choice for the public 
where these approaches are relevant, feasible, and consistent with 
regulatory objectives. E.O. 13563 emphasizes further that regulations 
must be based on the best available science and that the rulemaking 
process must allow for public participation and an open exchange of 
ideas. We have developed this rule in a manner consistent with these 
requirements.

B. Regulatory Flexibility Act

    The Department of the Interior certifies that this document will 
not have a significant economic effect on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
It does not change current funding requirements and any economic 
effects on small entities (e.g., the cost to obtain an appraiser 
license) would be incurred as part of their normal cost of doing 
business.

C. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    (a) Will not have an annual effect on the economy of $100 million 
or more.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Will not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or

[[Page 28783]]

the ability of the U.S.-based enterprises to compete with foreign-based 
enterprises.

D. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local, or tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) is not required.

E. Takings (E.O. 12630)

    This rule does not effect a taking of private property or otherwise 
have taking implications under E.O. 12630. A takings implication 
assessment is not required.

F. Federalism (E.O. 13132)

    Under the criteria in section 1 of E.O. 13132, this rule does not 
have sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement. A federalism summary impact 
statement is not required.

G. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule: (a) Meets the criteria of section 3(a) 
requiring that all regulations be reviewed to eliminate errors and 
ambiguity and be written to minimize litigation; and
    (b) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

H. Consultation With Indian Tribes (E.O. 13175)

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian tribes through a 
commitment to consultation with Indian tribes and recognition of their 
right to self-governance and tribal sovereignty. We have evaluated this 
rule under the Department's consultation policy and under the criteria 
in E.O. 13175 and have identified substantial direct effects on 
federally recognized Indian tribes that will result from this 
rulemaking. Tribes may be substantially and directly affected by this 
rulemaking because it allows for the submission of appraisals for 
transactions involving Indian property without Departmental review and 
approval. As such, the Department consulted with tribes on this rule as 
part of the consultation sessions addressing ITARA and hosted listening 
sessions with Indian tribes and trust beneficiaries at:

 August 17, 2016--Listening session at the Indian Land 
Workgroup Group Symposium, Green Bay, Wisconsin
 August 22, 2016--Tribal consultation in Albuquerque, New 
Mexico
 August 26, 2016--Tribal consultation in Minneapolis, Minnesota
 August 29, 2016--Tribal consultation in Seattle, Washington
 August 31, 2016--Tribal consultation in Billings, Montana
 September 7, 2016--Tribal consultation in Tulsa, Oklahoma
 September 9, 2016--Tribal consultation in Sioux Falls, South 
Dakota
 September 12, 2016--Tribal consultation in Palm Springs, 
California
 September 19, 2016--Tribal consultation by teleconference
 September 29, 2016--Tribal consultation in Window Rock, 
Arizona
 October 4, 2016--Tribal consultation in Rapid City, South 
Dakota

These dates and locations were announced in the Federal Register. See 
81 FR 47176 (July 20, 2016), as corrected by 81 FR 51210 (August 3, 
2016). The ``Responses to Comments'' section above summarizes comments 
received on the rule and how this final rule addresses those comments.

I. Paperwork Reduction Act

    This rule contains an information collection that requires approval 
by OMB. The Department is seeking approval of a new information 
collection and a revision to an existing regulation, as follows.
    OMB Control Number: 1076-0188.
    Title: Appraisals & Valuations of Indian Property, 43 CFR 100.
    Brief Description of Collection: The Department is proposing to 
establish minimum qualifications for appraisers of Indian property that 
require the submission of the appraiser's qualifications to the 
Department for verification. Submission of the appraisal or valuation 
itself is already authorized by other OMB Control Numbers under the 
associated 43 CFR or 25 CFR part (for example, the submission of 
appraisals for leasing of Indian land is included in the lease 
information collection authorized by OMB Control Number 1076-0181).
    Type of Review: New collection.
    Respondents: Individuals and Private Sector.
    Obligation to Respond: To Obtain or Retain a Benefit.
    Number of Respondents: 155.
    Number of Responses: 465
    Frequency of Response: 3 per year, on average.
    Estimated Time per Response: One hour.
    Estimated Total Annual Hour Burden: 465 hours.
    Estimated Total Annual Non-Hour Cost Burden: $0.
    A Federal agency may not conduct or sponsor, and you are not 
required to respond to, a collection of information unless the form or 
regulation requesting the information displays a currently valid OMB 
Control Number.

J. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 (NEPA) is not 
required because this is an administrative and procedural regulation. 
(For further information see 43 CFR 46.210(i)). We have also determined 
that the rule does not involve any of the extraordinary circumstances 
listed in 43 CFR 46.215 that would require further analysis under NEPA.

K. Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in E.O. 13211. A Statement of Energy Effects is not required.

L. E.O. 13771: Reducing Regulation and Controlling Regulatory Costs

    This action is not an E.O. 13771 regulatory action because it 
imposes no more than de minimis costs.

List of Subjects in 43 CFR Part 100

    Indians, Indians--claims, Indians--lands, Mineral resources.

    For the reasons given in the preamble, the Department of the 
Interior amends 43 CFR subtitle A, by adding part 100 to read as 
follows:

Title 43--Public Lands; Interior

Subtitle A--Office of the Secretary of the Interior

Department of the Interior

PART 100--WAIVING DEPARTMENTAL REVIEW OF APPRAISALS AND VALUATIONS 
OF INDIAN PROPERTY

Subpart A--General Provisions
Sec.
100.100 What terms should I know for this part?
100.101 What is the purpose of this part?
100.102 Does this part apply to me?

[[Page 28784]]

100.103 How does the Paperwork Reduction Act affect this part?
Subpart B--Appraiser Qualifications
100.200 What are the minimum qualifications for qualified 
appraisers?
100.201 Does a qualified appraiser have authority to conduct 
appraisals or valuations of any type of Indian property?
100.202 Will the Secretary verify the appraiser's qualifications?
100.203 What must the Tribe or individual Indian submit to the 
Secretary for verification of the appraiser's qualifications?
100.204 When must the Tribe or individual Indian submit a package 
for Secretarial verification of appraiser qualifications?
Subpart C--Appraisals and Valuations; Departmental Review and Waivers
100.300 Must I submit an appraisal or valuation to the Department?
100.301 Will the Department review and approve my appraisal or 
valuation?
100.302 May I request Departmental review of an appraisal even if a 
qualified appraiser completed the appraisal or valuation?
100.303 What happens if the Indian Tribe or individual Indian does 
not agree with the submitted appraisal or valuation?
100.304 Is the Department liable if it approves a transaction for 
Indian property based on an appraisal or valuation prepared by a 
qualified appraiser?

    Authority: 5 U.S.C. 301; Pub. L. 114-178.

Subpart A--General Provisions


Sec.  100.100   What terms I should know for this part?

    Appraisal means a written statement independently and impartially 
prepared by a qualified appraiser setting forth an opinion of defined 
value of an adequately described property as of a specific date, 
supported by the presentation and analysis of relevant market 
information.
    Appraiser means one who is expected to perform an appraisal or 
valuation competently and in a manner that is independent, impartial, 
and objective.
    Indian means:
    (1) Any person who is a member of any Indian tribe, is eligible to 
become a member of any Indian tribe, or is an owner as of October 27, 
2004, of a trust or restricted interest in land;
    (2) Any person meeting the definition of Indian under the Indian 
Reorganization Act (25 U.S.C. 479) and the regulations promulgated 
thereunder; or
    (3) With respect to the inheritance and ownership of trust or 
restricted land in the State of California under 25 U.S.C. 2206, any 
person described in paragraph (1) or (2) of this definition or any 
person who owns a trust or restricted interest in a parcel of such land 
in that State.
    Indian property means trust property or restricted property.
    Indian tribe means an Indian tribe under section 102 of the 
Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a).
    Land Buy-Back Program for Tribal Nations means the program 
implementing the land consolidation provisions of the settlement 
agreement in Cobell v. Salazar, No. 1:96CV01285-JR (D.D.C.), as 
confirmed by Congress in the Claims Resolution Act of 2010 (Pub. L. 
111-291).
    Qualified appraiser means an appraiser that is authorized to 
prepare an appraisal or valuation of Indian property because he or she 
meets the minimum qualifications of this part.
    Qualifications statement means a written overview of an appraiser's 
education, professional history and job qualifications, providing an 
indication of an appraiser's competency to perform specific types of 
assignments. The qualifications may include information regarding 
education (degrees and educational institutions or programs); 
professional affiliations, designations, certifications, and licenses; 
work experience (including companies or organizations, the dates of 
employment, job titles and duties, and any service as an expert 
witness); awards and publications; types of properties appraised; types 
of appraisal and valuation assignments; and clients.
    Restricted property means lands, natural resources, or other assets 
owned by Indian tribes or individual Indians that can only be alienated 
or encumbered with the approval of the United States because of 
limitations contained in the conveyance instrument, or limitations in 
Federal law.
    Secretary means the Secretary of the Interior or an authorized 
representative.
    Trust property means lands, natural resources, or other assets held 
by the United States in trust for Indian tribes or individual Indians.
    Us/we/our means the bureau, agency, or entity within the Department 
of the Interior that administers appraisals and valuations of Indian 
property.
    Valuation means all other valuation methods or a market analysis, 
such as a general description of market trends, values, or benchmarks, 
prepared by a qualified appraiser.


Sec.  100.101  What is the purpose of this part?

    This part describes the minimum qualifications for appraisers, 
employed by or under contract with an Indian tribe or individual 
Indian, to become qualified appraisers who may prepare an appraisal or 
valuation of Indian property that will be accepted by the Department 
without further review or approval when the Indian tribe or individual 
Indian waives Departmental review and approval.


Sec.  100.102  Does this part apply to me?

    This part applies to anyone preparing or relying upon an appraisal 
or valuation of Indian property.


Sec.  100.103  How does the Paperwork Reduction Act affect this part?

    The collections of information contained in this part have been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned OMB Control Number 1076-0188. Response is required to 
obtain a benefit.

Subpart B--Appraiser Qualifications


Sec.  100.200  What are the minimum qualifications for qualified 
appraisers?

    (a) An appraiser must meet the following minimum qualifications to 
be a qualified appraiser under this part:
    (1) The appraiser must hold a current Certified General Appraiser 
license in the State in which the property appraised or valued is 
located;
    (2) The appraiser must be in good standing with the appraiser 
regulatory agency of the State in which the property appraised or 
valued is located; and
    (3) The appraiser must comply with the Uniform Standards of 
Professional Appraisal Practice (USPAP) rules and provisions applicable 
to appraisers (including but not limited to Competency requirements 
applicable to the type of property being appraised or valued and Ethics 
requirements). This includes competency in timber and mineral 
valuations if applicable to the subject property.


Sec.  100.201  Does a qualified appraiser have the authority to conduct 
appraisals or valuations of any type of Indian property?

    All qualified appraisers of Indian property must meet the 
Competency requirements of USPAP for the type of property being 
appraised or valued. Competency can be demonstrated by previous 
completed assignments on the type of properties being appraised, 
additional education or training in specific property types, or 
membership and/or professional designation by a related professional 
appraisal association or group.


Sec.  100.202  Will the Secretary verify the appraiser's 
qualifications?

    The Secretary will verify the appraiser's qualifications to 
determine

[[Page 28785]]

whether the appraiser meets the requirements of Sec.  100.200.


Sec.  100.203  What must the tribe or individual Indian submit to the 
Secretary for a verification of the appraiser's qualifications?

    The tribe or individual Indian must submit the following with the 
appraisal or valuation:
    (a) A copy of the appraiser's current Certified General Appraiser 
license;
    (b) A copy of the appraiser's qualifications statement;
    (c) The appraiser's self-certification that the appraiser meets the 
criteria in Sec.  100.200; and
    (d) If the property contains natural resource elements that 
contribute to the value of the property, such as timber or minerals, a 
list of the appraiser's additional qualifications for the specific type 
of property being valued in the appraisal report.


Sec.  100.204  When must the tribe or individual Indian submit a 
package for Secretarial verification of appraiser qualifications?

    The tribe or individual Indian must submit the package of appraiser 
qualifications to the Secretary with the appraisal or valuation.

Subpart C--Appraisals and Valuations; Departmental Review and 
Waivers


Sec.  100.300   Must I submit an appraisal or valuation to the 
Department?

    Appraisals and valuations of Indian property must be submitted to 
us if relied upon or required for transactions requiring Secretarial 
approval under titles 25 and 43 of the CFR (other than those under the 
Federal Land Policy and Management Act).


Sec.  100.301   Will the Department review and approve my appraisal or 
valuation?

    (a) The Department will not review the appraisal or valuation of 
Indian property and the appraisal or valuation will be considered final 
as long as:
    (1) The submission acknowledges the intent of the Indian tribe or 
individual Indian to waive Departmental review and approval;
    (2) The appraisal or valuation was completed by a qualified 
appraiser meeting the requirements of this part; and
    (3) No owner of any interest in the Indian property objects to use 
of the appraisal or valuation without Departmental review and approval.
    (b) The Department must review and approve the appraisal or 
valuation if:
    (1) Any of the criteria in paragraph (a) of this section are not 
met; or
    (2) The appraisal or valuation was submitted for:
    (i) Purchase at probate under 43 CFR part 30;
    (ii) The Land Buy-Back Program for Tribal Nations;
    (iii) An acquisition by the United States to which the Uniform 
Appraisal Standards for Federal Land Acquisitions applies; or
    (iv) Specific legislation requiring the Department to review and 
approve an appraisal or valuation.


Sec.  100.302   May I request Departmental review of an appraisal even 
if a qualified appraiser completed the appraisal or valuation?

    If you do not specifically request waiver of Departmental review 
and approval under Sec.  100.300(a)(1), the Department will review the 
appraisal or valuation.


Sec.  100.303   What happens if the Indian tribe or individual Indian 
does not agree with the appraisal or valuation prepared by their 
qualified appraiser?

    If the Indian tribe or individual Indian does not agree with the 
appraisal or valuation prepared by their qualified appraiser, the 
Indian tribe or individual Indian should not submit the appraisal or 
valuation under this part.


Sec.  100.304  Is the Department liable if it approves a transaction 
for Indian property based on an appraisal or valuation prepared by a 
qualified appraiser?

    The Department is not liable for any deficient or inaccurate 
appraisal or valuation provided by the tribe or individual Indian that 
it did not review or approve, even if the Department approved a 
transaction for Indian property (including but not limited to a lease, 
grant, sale, or purchase) based on the appraisal or valuation.

    Dated: June 20, 2017.
James E. Cason,
Associate Deputy Secretary.
[FR Doc. 2017-13191 Filed 6-23-17; 8:45 am]
BILLING CODE 4337-15-P